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Posted by Seth on April 16, 2007, 1:03 am
Please log in for more thread options > MOC835 wrote:
>> I sold a rental property in 2004 to another party. After
>> the sale (during 2006) I was taken to court about some
>> unpaid water bills for the property. It turns out that that
>> a seperate water billing account (other then the one I was
>> paying on) existed for this property. To make a long story
>> short, the purchaser (to whom I sold the property) sued me
>> for the balance of this water bill.
>>
>> As a result of the court case, I was ordered to pay the
>> full amount of the past due water bill. I also recieved
>> a judgement against the person I originally bought the
>> property as they had not paid the outstanding water bill (as
>> required) at the closing of my purchase of the property.
>>
>> My question is simple....Can I deduct the net amount I have
>> to pay. (Amount I paid LESS the amount of the judgement I
>> received) If so, where do I report this??
> Add the net amount to your basis for reporting the sale.
Fortunately, he can still file an amended return (and get a
refund) for 2004. What if he'd sold the property earlier?
Shouldn't a deduction of some sort be available for the
current year?
Seth
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